I bought an M3 but I am doing a residency and making only $42K a year...but next year I will be making 100K+ So I don't think it be a horrible choice but i am also living in Iowa where housing is dirt cheap and I am singe and 25. I feel comfortable with the payments, even though it is a 1/3rd of my salary each month for this year....I feel if I got in over my head I can always sell the car...is this thinking flawed?

I don't think that is flawed thinking at all. And best of all, while you're busting your arse doing your residency you at least have satisfaction in getting behind the wheel of the hottest sport sedan in the world afterwards. Even if it may only be for a 5 minute commute home.